Posted on 04/22/2010 8:20:18 AM PDT by Zeddicus
NEW YORK (CNNMoney.com) -- Existing home sales jumped 6.8% in March, with home buyers racing to get a tax credit that expires in April, according to a real estate industry report released Thursday.
The National Association of Realtors reported that existing home sales rose last month to a seasonally adjusted annual rate of 5.35 million units, up from the revised rate of 5.01 million in February. Sales year-over-year were up 16.1%.
(Excerpt) Read more at money.cnn.com ...
We are in an area that wasn't even as hard-hit as many parts of the country, and more than half of recent sales are foreclosures.
tax credit is ending
You can’t polish a turd.
(But some folks won’t stop trying.)
6.8% of zero really isn’t that much ... think before reading.
Yep. And in the cases where they are legitimate sales, ironically, this actually causes home values to drop even further, because people are willing to sell at a slightly greater loss because they know they can recoup some of it in taxes. This just makes the collapse of the home value market that much worse.
>>You can’t polish a turd.<<
But you can roll it in glitter!
Definitely! Sales are being driven by bank-owned foreclosures, short sales, and private sales by people who can afford to undercut the market. The market is in a tailspin, but to read articles like this, you’d never know it.
We did this ourselves last fall when we sold our house. Fortunately for us we were in a situation where we could afford to take a low offer and still walk away with some cash in pocket, but with our low sale we set the market and eroded values for everyone else who were in worse debt situations. Many similar houses that were on the market when we were selling are still on the market today, 6 months later.
That’s a good way of putting it.
Meanwhile, sales of imaginary homes grew by only 4% for the same period.
Yes and no. Resold foreclosed houses are counted as sales; the act of foreclosing on a house is not.
I don't think so... on the sites we watch, we often see what appear as "sales", but when you drill into the sale, you see that the "buyer" is actually a bank; the transfer of ownership to a bank after a foreclosure appears as a sale.
Yeah, but folks like Case & Shiller, or (believe it or not) the Commerce Department actually do design their studies to measure the economy, and they’re not all stupid and their metrics predate the current regime. Sites can have different intents. A site monitoring home values might report a foreclosure as a relevant data point; a site measuring economic growth indicators certainly would recognize that measuring a foreclosure as a sale is harmful towards its purpose.
And I’m not terribly bullish on the housing market, either. I’m concerned about the effect of all these foreclosures hitting the market, “bond vigilantes” and the crashing down to earth of the effects of the homebuyers’ credit. Further, I think this has been a healthy correction, whose ripples into the larger economy were due to stultifyingly stupid economic policy (inconsistently bailing out banks, suddenly doubling the fed rate in ‘07, no-money-down home sales to illegal aliens despite their hyper-cyclical economics, the bizarre “We’re all going to die” panics in Congress and the MSM, etc.) So I’m not inclined to be desperately seeking signs of “recovery” since I see a fast bounce as more “relapse” than “recovery.”
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